Since 2015 AT&T and Verizon Lost $130+ Billion and Cut 126,000 Employees; More Gov’t Subsidies Planned Anyway (Charts Included)

By B.N. Frank

The FCC has catered to the telecom and cable industries for decades (see 1, 2, 3).  This has led to numerous lawsuits filed against the agency for NOT protecting the public from unsafe levels of cell phone and WiFi radiation (see 1, 2, 3), 5G on Earth (see 1, 2, 3, 4, 5) and in space, and also for allowing telecom and cable companies to overcharge Americans.

A 2020 lawsuit filed by a group of telecom experts (The Irregulators) determined that Americans have already paid to have access to safer and more secure high-speed internet access via fiber optics to the premises and copper landlines (see 1, 2).

Thanks to Irregulator Bruce Kushnick for another mind-blowing article about how government funding continues anyway.

From Medium:

AT&T and Verizon Lost Over $130 Billion Since 2015 & Cut 126,000 in Staff.

By Bruce Kushnick

And you want to give them new government subsidies because…Investigations of these companies are needed. No government subsidies should be given — History shows that they virtually never worked as planned due to corporate mismanagement or flat out misrepresentation of how the funds would be used.

NOTE: This is a partial list created from AT&T financials and news reports. These numbers are rounded.)

AT&T spent over $150 billion dollars on merging with DirecTV and then WarnerMedia. Then, in just the last 6 years, it had about $120 billion in losses or write offs (known as “impairments”). And, as we will discuss, Verizon also had losses of almost $10 billion in this same time-frame from their purchase and sales of AOL and Yahoo and the collateral damage that ensued. And this is a partial list.

Over the last 3 decades, both AT&T and Verizon, which are historically telecommunications infrastructure companies that control America’s public telecom utilities, pursued a course of becoming content providers of media, advertising and entertainment, and like every other time, their plans failed miserably, over and over and over.

Unfortunately, and unknown to most, AT&T controls the state telecommunications infrastructure of 21 states while Verizon controls much of the East Coast, from Massachusetts to Virginia. And these include all wires, including the copper wires and the fiber optics lines that deliver wireline video, voice and internet access services and also to provide wireless services

And these 2 companies, with the addition of CenturyLink, (who controls the other parts of America in the Western states, such as Colorado or Oregon), caused the Digital Divide. These 3 holding companies, (that never seriously competed for wireline high speed broadband, even though it was part of every merger as a condition for growing larger) are the former “Bell Companies”. And acting as ‘one’, they never properly upgraded their state public utilities’ telecom infrastructure to high-speed broadband, especially in rural and lower income urban areas. It also allowed prices to have continuous rate increases, especially because they have ‘defacto deals’ with the cable companies to not compete or question the addition of made-up fees, which then become industry standards.

What is worse; they changed their focus and now claim they are entertainment/content companies — as opposed to serving their primary customer — their wired and wireless telecommunications utility customers, including the cities and states— with fiber optic services.

The Christmas Presents to AT&T et al., that are built into your excessive rates and your excessive taxes — on all services.

There are now massive financial gifts underway to be given out where AT&T and Verizon and CenturyLink are likely to be the biggest benefactors. The Biden Infrastructure Act puts $65 billion in play to solve the Digital Divide and in a knee-jerk reaction, the states are also throwing billions that are adding to these corporate gifts.

It is sad, but ironic that no one has called for investigations of AT&T et al.’s role in creating the Digital Divide, as one has only to look at a map to see that the areas underserved and are in the companies’ franchised service areas. Nor has there been calls for investigations into the hundreds of billions already collected for broadband state-by-state since the 1990’s — and continuing today through a series of different financial games.

But there is a much larger question now — AT&T and Verizon are the model for corporate mismanagement and misdirection.

They have not only bought and harmed healthy media and entertainment companies as they attempted to monetize their properties to their wired and wireless and satellite services, tied to their internet (ISP service). I.e., they want to track you, and sell that data to the advertisers of their media properties. And at the same time, they used these companies as propaganda machines for their own services and policies.

Moreover, they have ‘dis-invested’ in the network upgrades, and have slashed staff to even do their primary work. they are NOT maintaining their wireline infrastructure and upgrading to fiber optics in their service areas — even when they were given tax benefits to hire more staff and rate increases to pay for the upgrade the networks.

Adding insult to financial manipulations, they have spent massive amounts of money on areas like general corporate administration, which include lobbyists, lawyers and executive pay — and then charged it to local phone customers. In fact, they spent more than double on this one area that on their network upgrades.

The rest of this article focuses on just the financial reports, the failed mergers, and staff cuts.

Verizon’s Mergers and Losses.

Competing for the second “most incompetent award in telecommunications”, Verizon also decided it would not properly upgrade the state utilities they control and instead become a media and wireless company.

(NOTE: This is a partial list created from Verizon’s financial reports, statements, and news stories.)

  • Verizon bought AOL and Yahoo, for about $9 billion; AOL (which also owned Huffington Post) was $4.4 billion and Yahoo was priced at $4.5 billion, and both were sold at a fire sale for an estimated $5 billion.
  • Tumblr, which Yahoo bought for $1.1 billion in 2013, was sold for under $20 million by Verizon.
  • Verizon sold HuffPost in November 2020 with $119 million loss.
  • Verizon took a $4.6 billion dollar ‘impairment” for “Oath”, also known as Verizon Media, to tie together these media assets.
  • Verizon spent at least $53 billion on wireless spectrum auctions for fixed and mobile broadband instead of building out their fiber optic wireline to the home services.

Excessive Staff Cuts, Not Just from the Merger Sell Offs and Shutdowns

While we would expect declines in staff and construction expenses when you remove a company, these expenses go far beyond just that.

“ISP” Tax Gluttony — Never Used the Tax Benefits for Upgrading or Increasing Staff.

Tax Breaks Were Supposed to be Used for Broadband Build Out and Jobs.

As the chart details, AT&T and Verizon received huge tax benefits that they claimed would be used for fiber in the ground as well as the new staff to do it — never happened.

ArsTechnica reported that AT&T in November 2017 pushed for the corporate tax cut by promising to invest an additional $1 billion in 2018, with CEO Randall Stephenson saying;

“every billion dollars AT&T invests is 7,000 hard-hat jobs. These are not entry-level jobs. These are 7,000 jobs of people putting fiber in ground, hard-hat jobs that make $70,000 to $80,000 per year.”

AT&T Staff Cuts and Network Dis-Investment

In order to show how these numbers relate, we will use AT&T’s financial reports from 2015–2021.

  • AT&T has cut almost 67,000 staffers, going from 281,000 in 2015 to 215,000 in 2021.
  • AT&T network investment has gone down 25% since 2016 — that’s almost $6 billion less.
  • Historically, a state telecommunications utility spends 15–20% of their revenues on construction; AT&T has only spent, on average, less than 10%.
  • Dis-investment AT&T has written off — i.e. disinvested in the wireline networks and has taken 155% more in ‘depreciation’ than was spent on new construction.

More Money Spent on Lobbying, Marketing and Executive Pay than Infrastructure.

This chart shows that AT&T has not spent the majority of money on maintaining, building out or upgrading the networks, especially the state-based telecommunications utilities in 21 states, but instead spent the largest amount of expenses on selling, general administration and this category is also known as “corporate operations expenses”.

“Selling, General and Administrative Expense

Selling, general and administrative expense includes salaries and wages and benefits not directly attributable to a service or product, the provision for credit losses, taxes other than income taxes, advertising and sales commission costs, call center and information technology costs, regulatory fees, professional service fees and rent and utilities for administrative space. Also included is a portion of the aggregate customer care costs as discussed above in “Cost of Services.”

Don’t Hold Us Accountable for Anything — You Can’t Touch This:

Verizon and AT&T rely on regulations and the lack there of, based on the protections afforded to them by ‘forward-looking statements’ —

“In this report we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words “anticipates,” “believes,” “estimates,” “expects,” “hopes,” “forecasts,” “plans” or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.”

Nothing these companies say should be considered to be facts.

In 2015, AT&T closed a deal for DirecTV, estimated to be $67 billion, and in 2021 has had a fire sale for $16 billion. While AT&T still has a hand in these companies, AT&T said of the original plan:

“This transaction allows us to significantly expand our high-speed Internet service to reach millions more households, which is a perfect complement to our coast-to-coast TV and mobile coverage.”

“Corporate Mismanagement” would be the nice way to put this. In just a few short years, AT&T and Verizon have figured out how to lose billions of dollars and then be rewarded with more taxpayer funded government subsidies.

We need to learn from history.

AT&T covers 76 million locations in 21 states — and yet, the current AT&T documents claim that they have only 5.7 million total fiber optic lines of which only 3.4 million are doing 1Gbps speeds.

But, according to AT&T, they told investors there are NO significant requirement to build out their networks or how they use their ‘capital expenditures’.

“We believe that we have significant discretion over the amount and timing of our capital expenditures on a Company-wide basis as we are not subject to any agreement that would require significant capital expenditures on a designated schedule or upon the occurrence of designated events.”

Isn’t 4 Decades of Corporate Misdirection about Fiber Optic Broadband and New Services Enough?

This has been going on for decades: America’s original “National Infrastructure Initiative”, commonly called the “Information Superhighway”, circa 1991–1996, was to have America completed by 2010, with ½ of America covered with a fiber optic wireline service by the year 2000.

That’s $26 billion dollars — to be spent from 1995–2000.

  • Summary of the failed fiber optic deployments in America and the $500 billion already charged to customers, cities and states since 1993: — Written for Huffington Post in 2014.

How many times did these companies lose billions on attempting to be entertainment and media companies or promise a fiber optic future?

In the 1980’s ,it was ‘Videotext and Audiotext Gateways’; in the 1990’s, it was Tele-TV and Americast — claiming over 70 million would have interactive broadband services by 2000; then there was the AT&T-Comcast deal for $72 billion in 2001, followed by the state-based cable franchises of AT&T around 2005, then…

Never heard of any of these previous grandiose plans that all were used to get rid of regulatory oversight — while losing billions and never fulfilling their state obligations and goals or fully integrating the telecommunications the companies control with the media and entertainment they continue to fail at?

Ever hear of the Digital Divide? This is the road-map of how we got here and what to expect for the next 5 years. The Infrastructure plan and state plans are all on the path to repeat history because AT&T et al. have no interest in actually being ‘public utility’ telecommunications companies and serving the public, especially low income and rural areas, with the best networks in the world at affordable rates.

We will continue this discussion in the next series of articles and we’ll offer an alternative path.

As noted, the current Infrastructure Bill was written so that “bridging the digital divide” will largely be funded by federal dollars (see 1, 2, 3, 4) for providers that will likely install less secure (see 1, 2) and biologically harmful 5G and WiFi (see 1, 2, 3, 4, 5, 6).  Of course, states plan to pitch in additional taxpayer dollars toward this as well.

In regard to 5G, specific risks have been identified with this technology:

Reports have also shown that 4G service is still better and safer than 5G (see 1, 2, 3, 4).

Earlier this year, scientists submitted a letter to President Biden asking him to protect the public from 5G and other unsafe technology.  Instead he continues to commit to adding more.  Americans opposed to any or all of this may sign and share the following online petitions 1, 2, 3.

Activist Post reports regularly about government corruption and unsafe technology.  For more information visit our archives and the following websites.

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